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Thursday, January 20, 2011

MNP effect: Service providers alter gameplans

With over 600 million mobile subscribers set to get a choice to change their operators while retaining their numbers from tomorrow by availing mobile mumber portability (MNP), service providers are using every trick in the marketing trade to retain their customers and woo new ones. Prime Minister Manmohan Singh will be launching the service tomorrow.
However, operators are not expecting the churn due to MNP to be more than 1 per cent, from a current industry average churn rate of 4-5 per cent per month. This is also based on their experience in the circle of Haryana, where MNP was launched in December last year and about 100,000 customers decided to change their operators on a customer base of 19 million.

The operators focus is to retain their high-Average Revenue Per User (ARPU) postpaid customers, who contribute about 15-20 per cent to their revenue. They are also going out in a big way to retain their prepaid high-ARPU users.

Vodafone Essar, for instance, is already studying the records of their high-paying postpaid customers to see whether there has been a sudden drop in their ARPUs, as that is a clear reflection that he is using another alternate service.
“Our approach is to go to the consumer even before he registers to understand the reason — whether is it network problem, service or something else. Giving freebies or discounts is only a small part of the game,” said a Vodafone official.
Going by its record in Haryana (where the service was launched on an experimental basis last December), the company says it has been able to retain 60 per cent of the customers who might have shifted services.
State-owned Mahanagar Telephone Nigam Ltd (MTNL), which provide services in Delhi and Mumbai, also echoed similar views. “We have asked our marketing and customer care people to address the issues of our subscribers, who are likely to shift. MTNL also offers BlackBerry services, which has picked up very well. So, there will be a focus on high-end customers.”
New players like Sistema Shyam, which offer CDMA services are looking at wooing customers to their fold. The company is planning to offer subsidised mobile phones under a two way scheme — one you pay for the phone upfront but get reimbursed for the money you have spend through free talk time, downloads and even SMSes. The second offer is to buy it under a long term EMI scheme.
Sistema that runs under the MTS brand name is also planning to offer packages which have a lot of free talk time and data rolled in. The company is also cashing on the fact that with MNP, the differentiation in the numbering plan between CDMA and GSM would go away.
Other new players like Loop Mobile are trying to attract customers with a service guarantee — they have decided to compensate their subscribers for every call drop. “This does not mean that we have not stopped bringing a superior network. In case of any call drop, a subscriber has to send an SMS NC to 50800 (postpaid) / 50505 (prepaid) and get their money back.”
Loop is also bringing its customer care service under scrutiny. It will answer all calls to the customer care centres within 10 seconds or reverse the money spent on the call.
Operators however say state-owned Bharat Sanchar Nigam Limited (BSNL) might be the one which would be impacted the most from MNP as it has not been able to make fresh investments to modernise and expand its network capacity-based on the trend in Haryana.
Incumbents also believe the churn would not benefit new operators, as customers are looking for established player with a tested pan-India network to churn.
Others like Uninor go further to say MNP will not be a game changer. “Our research suggests that MNP will not be a game changer. However, it could still result in some interesting new strategies. MNP will definitely have higher relevance in the postpaid segment since these number loyal subscribers haven’t yet had free choice on worries of losing their number identity. MNP may also force operators to think segmentation in the prepaid market,” says its Corporate Affairs executive Vice President Rajiv Bawa.
For availing the MNP service, mobile subscribers have to pay Rs19. To port his number, the subscribers have to request the new operator for acceptance of his connection and the process would have to be completed in four days.
Syniverse and MNP Interconnection Telecom Solutions (MITS) have been given licence by the Department of Telecommunications (DoT) to implement MNP across the country.
MNP was initially scheduled to be implemented from December 31, 2009 in the metros and category-A circles, while the rest of the country was slated to have this platform by April 1, 2010.source